Fed’s Fischer Says Fiscal Policy Could Help Fight Low Growth
- Stimulative policies could aid central bank in raising rates
- Productivity, demographic trends pulling down growth prospects
Stanley Fischer, vice chairman of the U.S. Federal Reserve.
Photographer: T.J. Kirkpatrick/BloombergFederal Reserve Vice Chairman Stanley Fischer said government policies could partly counteract the impact of lower productivity and an aging population that are holding back the U.S. economy and weighing on interest rates.
“Some combination of more encouragement for private investment, improved public infrastructure, better education, and more effective regulation is likely to promote faster growth of productivity and living standards,” Fischer said in the text of a speech Monday to the Economic Club of New York. Such policies could also “reduce the probability that the economy and, particularly, the central bank will in the future have to contend with the effective lower bound” for interest rates.